Trump’s Historic Shift on Medicaid

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Requiring able-bodied adults to work for their Medicaid is just part of the Trump administration’s drive to remake the decades-old health insurance program for the poor.

The administration signaled late last year that it welcomes state-based ideas to retool Medicaid and “help individuals live up to their highest potential.” At least 10 states have requested waivers that would allow them to impose work requirements and other obligations.

For example: They would require more recipients to contribute small monthly premiums. They would insist on monthly paperwork. They would impose lifetime limits on coverage. And they would kick recipients off Medicaid for a period of time — 30 days, or perhaps six months — for failing to follow the rules.

All the states requesting Medicaid work requirements are led by Republican governors who tout the “it’s a trampoline, not a hammock” approach to the social services safety net.

In the past few weeks, the Trump administration has granted approval to Kentucky and Indiana to begin imposing new requirements for Medicaid recipients that are likely to push some people off the rolls. Arizona, Arkansas, Kansas, Maine, Mississippi, New Hampshire, Utah and Wisconsin — all led by Republican governors — also have requested federal permission to adopt new requirements. Medicaid is a joint federal-state program, so states need federal approval to make substantial changes.

In Kentucky alone close to 97,000 people will lose Medicaid benefits over the next five years as a result of new changes, one study estimated. In Mississippi, Medicaid enrollment would shrink by 58,995 — 9 percent — in the first year alone, according to the state’s application to the federal Centers for Medicare and Medicaid Services.

The Southern Poverty Law Center, the National Health Law Program and the Kentucky Equal Justice Center have sued to block implementation of the Medicaid changes in Kentucky. The three civil rights organizations are arguing that the Trump administration has overridden the federal Medicaid law, which only Congress can do, “overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.”

More Uninsured?

Indiana and Kentucky, as well as Arizona, Arkansas and New Hampshire, all expanded Medicaid eligibility to more low-income adults under the 2010 Affordable Care Act, also known as Obamacare. As a result, all of those states boosted the percentage of their residents with some form of health insurance. (Maine voters last year also approved the expansion, though the state hasn’t implemented it yet.)

But the imposition of new requirements would reverse some of those gains. It also entails a sharp break from the Obama administration’s explicit position that all changes to state Medicaid policies had to “increase and strengthen overall coverage of low-income individuals in the state.”

The Trump administration has removed that language as a criterion for approving changes to state Medicaid policies. Instead, the administration announced a different objective for Medicaid.

“We have a higher purpose than just handing out Medicaid cards,” Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said in a speech to state Medicaid directors in November. “The Medicaid program is a promise to help individuals live up to their highest potential, leading healthier, more fulfilling, and more independent lives.”

Verma’s speech was a prelude to CMS issuing new guidance in November indicating its openness to state proposals to add work requirements to their Medicaid programs, proposals the Obama administration routinely rejected. Out went increasing access to health care to the poor; in came language about employment leading to better health for enrollees by helping them to “rise out of poverty and attain independence.”

Instead of increasing access to Medicaid, the Trump administration said the changes it is pursuing will modify the behavior of beneficiaries to “promote upward mobility, greater independence and improved quality of life.”

It’s very much in keeping with longtime Republican orthodoxy that safety net programs should be only temporary ports for the poor. The long-term goal should be self-sufficiency. “Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration,” Verma said.

Many Republican governors have embraced the shift.

“I firmly believe that every human being aspires to earn her own success. For those whose family situation and health allow it, there is nothing quite as beneficial as the sense of accomplishment that comes from work,” Utah Gov. Gary Herbert said in an email to Stateline. “Medicaid meets the needs of many populations, but that part of Medicaid that is intended to help catch those who have fallen on hard times should do all that it can to assist their efforts to return to gainful employment.”

But the new philosophy has alarmed many who advocate for health care access for the poor. Instead of helping people obtain work, they say the Trump approach will simply deprive people of health care.

“It’s such a wrongheaded punitive policy that won’t achieve the end goal of putting people to work,” said Dee Mahan, director of Medicaid Initiatives at Families USA, a nonprofit that advocates for health care for all. “It’s breathtaking.”

‘Lockouts’ and Lifetime Limits

Since 2008, the federal government has given some states, including Indiana, permission to require some Medicaid beneficiaries to pay premiums for their coverage. Thanks to its recent waiver, Kentucky now has the authority to “lock out” beneficiaries for six months unless the person pays past-due premiums and also completes a financial or health literacy course. Maine, New Mexico and Wisconsin are seeking the same authority. (The Obama administration had already given Indiana permission to use lockouts as a concession for the state to expand Medicaid in 2015.)

In approving lockouts in Indiana, CMS said that requiring beneficiaries to meet program requirements would “strengthen beneficiary engagement in their personal health care plan” and provide incentives for people to become responsible decision-makers.

But at least one study found that imposing premiums in Medicaid leads to fewer people being covered. In Indiana, more than 46,000 otherwise eligible residents were not enrolled in Medicaid between February 2015 and December 2016 because they didn’t make their first payments on time. About 14,000 lost benefits for not making subsequent payments on time. And nearly 10,000 in that group were locked out of benefits for six months.

The half-dozen states that charge premiums now generally apply them only to Medicaid beneficiaries at higher income levels. But some states, such as Wisconsin and Maine, want to charge premiums to more beneficiaries. Wisconsin seeks to begin charging premiums of $8 a month to households whose income falls below the federal poverty line. For a family of four, that would mean a household income of no more than $25,100 a year.

CMS also gave Kentucky and Indiana the authority to lock out those who fail to renew their Medicaid eligibility on time.

Arizona, Kansas, Utah and Wisconsin also want to impose a lifetime limit on coverage. Wisconsin, for example, proposes a lifetime limit of 48 months. Kansas is shooting for 36 months. Arizona and Utah are hoping for five years, although in Arizona’s case, time that an enrollee worked wouldn’t count against the limit. Once time is up, recipients couldn’t receive Medicaid for the rest of their lives.

Federal officials also granted Kentucky’s request to end the practice of retroactive eligibility, under which people who are eligible for Medicaid but not enrolled are signed up retroactively when they show up for medical services. Maine is seeking permission to end retroactive eligibility as well.

Critics say the Trump administration’s philosophy demonstrates either ignorance about or indifference to the hardships and chaos confronting many who live in poverty. Many work multiple jobs, do contract work or are otherwise in situations where hours and fluctuations in income are hard to predict or to document. They may live in situations in which mail delivery is unreliable. They may not have access to computers.

“Many poor people face challenges that will make it very difficult to meet these requirements,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families. “There is low literacy and issues of homelessness, mental illness and addiction. They lack transportation and affordable child care. People will lose coverage because of this, including people who have jobs.”